AUTOMOTIVE : Deal Brief

 

 

Highlights

  • IMAP Spain advised CMP Automotive Group (CMP) on the sale of its sealing systems engineering division to Cooper Standard.
  • With this deal, Cooper Standard integrates one of its key engineering suppliers into its own processes. It provides Cooper Standard with critical know-how, which will enable it to reinforce its strategic position against the main competitors in the sector.
  • CMP’s sealing systems engineering division has maintained a long-lasting business relationship with Cooper Standard. This division was considered to be non-core by CMP within its current strategy and the transition of ownership is expected to be uneventful.
  • CMP manufactures rubber-metal anti-vibration and sealing devices, mainly for the automotive industry. The group’s overall revenue for 2018 was circa €300 million.
  • Cooper Standard is a global supplier of systems and components for the automotive industry, including rubber and plastic sealing systems, fuel & brake delivery systems and anti-vibration systems, among others. Listed on the NYSE, it has reported sales volumes of circa $3.6 billion.

Market Outlook

  • According to Bloomberg New Energy Finance’s 2018 report, electric vehicles are expected to make up 55% of overall global light vehicle sales by 2040. This means that automotive rubber-metal component manufacturers with a key dependency on combustion engines will either need to diversify into manufacturing rubber-metal components suitable for electric vehicles, or by some form, gain the ability to apply their technology to new or other rubber product industry verticals.
  • The diversification processes driven by companies reorganizing or moving into new/other industry verticals are expected to lead to a significant amount of M&A transactions in the automotive rubber-metal components industry.

Valuation Summary

  • Financial details for the deal have not been disclosed. However, looking at current valuations in the industry, valuations of 7x EBITDA or higher could be seen, depending on the size, geography and company specifics.

IMAP Approach

  • IMAP Spain advised the owners of CMP throughout the entire M&A process, from the valuation of the business unit, through closing. Though a complex transaction, it was completed in approximately 9 months.
  • The teams extensive experience in the metal-rubber auto-part vertical, as well as in the broader auto-part industry proved invaluable during the sales process.
  • In the last 15 years, IMAP Spain has completed over 25 transactions and valuation projects in the auto-parts industry.

Client Comment

Alfonso Ameyugo, CEO, CMP Automotive Group:

“We have been fully supported by IMAP Spain in divesting a non-core business unit of our company Group, particularly in the process of negotiating and closing a complex transaction.”

IMAP has closed 20 transactions in the Automotive sector since 2015

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